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Challenge to Philadelphia Pay History Ordinance Dismissed, But Ordinance’s Future Remains In Doubt

Last week, District Court Judge Mitchell Goldberg granted the City of Philadelphia’s Motion to Dismiss the Philadelphia Chamber of Commerce’s lawsuit challenging Philadelphia’s controversial new pay history ordinance. As we have discussed previously here, the ordinance would make it unlawful for an employer to inquire about a job applicant’s pay history and would severely restrict an employer’s ability to base a new hire’s initial pay on his or her compensation history. The ordinance had been scheduled to go into effect on May 23, but was stayed by Judge Goldberg, with agreement of the City, pending resolution of the City’s motion to dismiss the Chamber’s lawsuit challenging the ordinance.

Judge Goldberg’s decision is likely not the last word however, as it did not address the merits of the ordinance. Rather, the Court held that the Chamber, because of the way the lawsuit was worded, did not have standing to challenge the ordinance, and it gave the Chamber until June 13, 2017 to file an amended complaint to cure those deficiencies. The Chamber is now expected to do just that.

In the meantime, the question is whether and, if so when, Philadelphia employers need to start complying with the ordinance. Despite the fact that Judge Goldberg’s decision, in dismissing the Chamber’s lawsuit, arguably lifted the stay, the City announced the following position through a spokesperson:

If the chamber files an amended complaint that cures the standing defects identified by the court, the city will adhere to its agreement not to enforce the order until the chamber’s motion for preliminary injunction is resolved. If no amended complaint is filed within the period stipulated by the court, the city will begin taking steps to enforce the ordinance….

Given this statement, we believe that the best approach is for Philadelphia employers to continue to prepare to comply with the ordinance, but to hold off on implementation until we see what the Chamber does between now and June 13. If, as expected, the Chamber files an amended complaint, we will be back to playing the waiting game for a little while longer.

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About this Author

David Woolf, Drinker Biddle Law Firm, Philadelphia, Labor and Employment Litigation Attorney
Partner

David J. Woolf assists clients in a range of labor and employment-related matters, including employment litigation, non-competition and other restrictive covenant-related issues and union/management relations. David also actively works with our Corporate and Securities group on labor and employment deal diligence, providing guidance on the labor and employment aspects of actual and potential transactions.

David defends employers in employment-related litigation, including individual and class claims of discrimination, harassment...

(215) 988-2614